LONDON, England (CNN) -- Known for its support of Sharia-compliant banking, the British government is continuing to make legislative changes to level the playing field for Islamic instruments. One of the most revolutionary has been the foundations the Chancellor laid in the latest budget for "sukuk" or Islamic bonds.

Richard Ho, head of fund-linked derivatives at Barclays Capital called the Al-Safi Trust groundbreaking.

This would be the first time a Western country has raised money by issuing Sharia-compliant investment certificates in the Middle East. These certificates make similar payments to investors as conventional bonds but are not interest-based.

"Sukuk" are the most high-profile financial instruments in the Sharia-compliant world, having grown from almost nothing five years ago to a market of $70 billion in outstanding issues today.

Currently more money flows through London in the most commonly used instrument, "murabaha" -- a Sharia version of the conventional money and syndicated loan markets where banks lend and borrow to meet their short and medium-term financial needs.

In addition to these instruments, a handful of Sharia-compliant hedge funds and platforms have been established, despite the tight Koranic restrictions on their activities.

Investors are barred from selling something they do not own, undermining "shorting," the cornerstone of the hedge fund industry, and cannot earn interest.

Despite these constraints, Barclays Capital (the investment banking division of the UK bank) has teamed up with U.S.-based Sharia adviser, Sharia Capital, listed on London's AIM market, to develop the Al-Safi Trust.

It is a groundbreaking independent investment platform for Islamic finance, according to Richard Ho, head of fund-linked derivatives.

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"This is the first platform of its kind for alternative investing. It is the first one which goes right back to basics with the aim of making -- in the short-term Sharia -- and more generally ethical investing a scaleable reality," Ho told CNN.

Al-Safi has reworked the traditional investment platform infrastructure to make it compliant from the ground up.

The aim has been to create a Sharia-compliant tool that can be used by investment specialists -- those people who are very good at earning investment returns but less good at interpreting how to invest in compliance with Islamic principles.

By teaming up with Sharia Capital, Al-Safi aims to provide a platform that is constantly monitored for compliance by a Sharia board. It's a complex issue. Unlike the rule of law, Sharia is open to interpretation: for example, what might be acceptable in Kuwait might not be under Saudi Arabia's much stricter terms.

"With our Sharia advisor, we have ensured the robustness of the fund platform to facilitate efficient due diligence by both managers and investors," Ho continued.

Ho hopes the platform will smooth the investing process for both managers and investors. "Managers that use the platform don't need to know that much about Sharia compliance framework and process. You start with an approved investment universe and a well-defined strategy implementation process from which you can build a Sharia-compliant fund easily," he explained. The fund launches publicly in a few weeks.E-mail to a friend